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Nvidia and SK Group enter $500 billion AI partnership — plan to supercharge AI infrastructure with next-gen memory and massive AI factories
Nvidia and SK Group this week signed letters of intent to formalize their new strategic relationship valued at more than $500 billion. The strategic collaboration is multifaceted and includes a long-term memory supply agreement with SK hynix unveiled in June, SK Telecom's plans to build a 2-gigawatt AI data center based on the latest Nvidia hardware, and future expansions of AI infrastructure.
In addition to the multi-year memory supply and co-development agreement between Nvidia and SK hynix, the key part of the strategic relationship is SK Telecom's planned 2-gigawatt AI data center in South Korea. The installation will rely on Nvidia's DSX AI factory platform and deploy Vera Rubin accelerated computing systems equipped with SK hynix HBM4 memory. The first AI data center is set to enter service in 2027. The companies intend to use this infrastructure to support sovereign AI, enterprise AI, physical AI, and agentic AI deployments across South Korea and the Asia-Pacific region. In addition, the companies will work together on expansion of SK's AI infrastructure going forward, which is a rather vague way to say plans to deploy future AI platforms from Nvidia.
The most important part of the announcement is, of course, the gargantuan value — $0.5 trillion — of the intended strategic relationship. Based on what is disclosed, the figure is best interpreted as the aggregate value of commercial activity expected between the companies over several years, as it bundles together AI infrastructure construction and a long-term memory supply agreement under one umbrella. That activity likely will include the following:
SK Telecom's purchases of Nvidia GPUs, networking equipment, systems, and other hardware for its AI data centers.
Supplies of SK hynix memory to Nvidia under the long-term supply agreement.
Revenue of Nvidia's ecosystem partners involved in building the DSX AI factories (OEMs, ODMs, networking, storage, cooling, power, etc.).
Potential future expansion beyond the initial 2 GW deployment.
Speaking of the 2 GW AI data center, it is safe to say that it is going to use thousands of NVL72 VR200 racks and hundreds of thousands of Vera CPUs and Rubin AI GPUs. Unfortunately, this is as accurate as we can get with the rather vague announcement.
Nvidia describes DSX as a complete AI factory blueprint that combines its accelerated computing hardware, networking, software stack, and partner technologies into a data center-scale platform designed to deliver the lowest-cost token generation and maximum energy efficiency. Meanwhile, NVL72 VR200 will come with 166 kW – 240 kW per-rack power consumption ratings, whereas DSX can be deployed in various kinds of facilities with different power usage effectiveness (PUE). Since we do not know which NVL72 VR200 configuration SK Telecom plans to use, and since the PUE of the upcoming SK Telecom facility is unknown, it is impossible to estimate the number of racks and AI accelerators with any accuracy.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
This is a typical method of trying to excite the market. "Letter of intent" really don't mean much until the money starts making an impact to profits. Otherwise, it's just some gentleman agreement to try and stir up the market with a big number.
My sensation is that this letter of intent is like a sign that this AI bubble is getting so big that when it will pop one of the big companies will go, maybe one from the title.
2027 is wildly optimistic given, for example, none of Microsoft's projects that were announced/broken ground a few years ago have been completed.
And yes, letter of intents mean little e.g. Nvidia's letter of intent for $100 billion to OpenAI.
Shovel maker is desperate to keep shovel-selling business growing and number go up.
This is a typical method of trying to excite the market. "Letter of intent" really don't mean much until the money starts making an impact to profits. Otherwise, it's just some gentleman agreement to try and stir up the market with a big number.
Is it only a letter of intent? Good deity Tom's needs to stop sensationalizing this hubris. More hype for the "investors". Jensen's looking a little stressed these days, that panic sweat is unbecoming. This bubble, if it's not a "soft" burst is gonna hurt. I'm out of all the short term tech stock, and I have time for recover but oof, some people are gonna lose their retirements funds and they're probably fully unaware. This will be my third major market crash as an adult. It's not pretty...
